The hard times continue for the energy sector as Houston-based oil and natural gas company Vanguard Natural Resources LLC became the latest casualty of falling commodities prices.

Vanguard filed for Chapter 11 protection in Houston on Thursday. Paul Hastings, a longtime legal adviser to the company, is advising the debtor in its bankruptcy case. In its filing, Vanguard lists assets and liabilities each of between $1 billion to $10 billion.

Founded in 2006, Vanguard focuses on the acquisition, production and development of oil and natural gas properties in the Gulf Coast, Rocky Mountains, West Texas and mid-continent regions of the U.S. In its filing, Vanguard attributed its negative earnings and liquidity to low commodities prices that have hit hard the North American oil and gas industry.

“The difficulties faced by [Vanguard] are consistent with the difficulties faced industry-wide,” Vanguard CFO Richard Robert stated in his declaration in support of the company’s bankruptcy. “[Exploration and production] companies, like Vanguard, have been especially hard-hit from the decline in commodity prices, because their revenues are generated from the sale of unrefined oil and natural gas.”

Vanguard’s revenue declined from $788.1 million in 2014 to $566.6 million in 2015. Robert said it then plummeted to $264.4 million through the third quarter of 2016. In its third quarter report issued in November, Vanguard warned its investors that the company was exploring various financial options with its financial advisors to address its debt and liquidity issues.

Paul Hastings corporate partner Douglas Getten in Houston is leading a team from the firm advising Vanguard that includes fellow corporate partners Chris Dickerson and Lindsay Sparks, tax partner Greg Nelson and of counsel James Grogan and Will Burns. Paul Hastings said that Getten, who joined the firm in 2014 from Vinson & Elkins, had been working with Vanguard since 2011. Vinson advised Vanguard that year on its acquisition of Encore Energy Partners LP.

Since 2014, Paul Hastings has advised Vanguard on numerous deals, including its respective mergers in 2015 with energy firms LRR Energy LP and Eagle Rock Energy Partners LP, as noted by sibling publication the Texas Lawyer.

While overall business bankruptcies are down from their historic peak a half-dozen years ago, since the beginning of 2015, more than 100 oil and natural gas producers in the U.S. have filed for bankruptcy and countless others have renegotiated their debts with creditors in order to stay afloat as depressed oil and gas prices threaten their operations, according to an analysis by Haynes and Boone.

Jones Day recently released a report detailing the top 10 bankruptcies of 2016. With only one exception, all of the largest bankruptcy cases last year involved energy companies, the largest being SunEdison Inc.’s Chapter 11 filing in April 2016. Skadden, Arps, Slate, Meagher & Flom snagged the restructuring role for SunEdison in that case, while firms like Jones Day, Kirkland & Ellis, Vinson and Weil, Gotshal & Manges have picked up coveted lead counsel assignments in other bankruptcy cases.

Davis Polk & Wardwell’s Marshall Huebner advised Denver-based Bonanza Creek Energy Inc. on its Chapter 11 filing last month in Delaware, while Pachulski Stang Ziehl & Jones took the lead for Forbes Energy Services Ltd. on its bankruptcy petition in Texas.


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